tv [untitled] January 11, 2011 7:30am-8:00am EST
drug was strong enough to cause a robbery of this magnitude. we can do is describe this to financial speculation nothing less than prices will translate to end user prices would. consumers worldwide have to have to pay for the fuel. and so this is going to have a real impact on. the called the bridge. and a quick look at the markets european stocks are higher in london the footsies higher more than the percentage in london barclays rallying three point seven percent and lloyds banking group is adding two percent shares of h.s.b.c. holdings have jumped to point six percent off to citigroup upgraded the investment bank to hold from vite citing strong new management expectations for strong growth from asian operations the dax is high point five percent shares of c. minnesota giving two percent and drive any after the electronics and engineering
chief financial officer said the company will report higher fiscal first quarter earnings than sales. and here in russia the markets have reopened after a ten day break for new year the indices are making only modest gains on the back of the strong got world priced r.t.s. is up to six hundred percent my sets this trading point seven percent higher. russian metal producer m.k. is losing the gains as the company announced it paid two thousand and nine dividends on time called producer meshal is also among the top gave us on the my six after coal prices rose to a two year high as heavy floods disrupted mines and cut transport in australia strong and crude prices they've given some support to russia's world majors. more than three percent on the r.t.s. . but the business bulletin but you can always get most for a small website are two dot com slash business.
officials are pulling out the stops to get their hands on julian. remodeling that forces the permits personal data about the so you see it's to build a criminal texts. the loss of five ship stranded in frozen seas all fractions of fall rees coast awaits rescue all price break ins and school the previous vessels more navigable the waters despite the hawse weather. and the cia comes on the fire for allegedly heartbreak a terrorist one of its own presidents goes to court for minor offenses despite being wanted for a string of deadly attacks and latin america. next days a black magic marker keyser as he's currently states but discuss the remaining government a new fortune teller which is alongside all the all the latest financial news that's coming up next.
my stature this is the kaiser report. i put a hex on you so about which is stacy ever tell me more max romania's which is curse income tax ruling so because of the financial crisis and the collapse of the banking systems and g.d.p.'s around the world romania's government has started taxing witches and fortune tellers from the first of january this year and because of this the witches are basically cursing the government now queen which brought turbo is furious about the new law and she says that she plans to cast a spell using a particularly effective concoction of cat excrement and a dead dog this is her reasoning for it we do harm to those who harm us they want to take the country out of the crisis using us they should get us out of the crisis
because they brought us into it i might add they brought us into it the global banking cartel through what could be called just as wacky as using cat action and dead dogs that they stuff into a concoction of some sort of securitized product yet won't goldman sachs collateralized debt obligation most of it is cat extreme it and dogs this is what they're planning the federal reserve bank's balance sheet in washington the reason why they're afraid to do an audit at the request of ron paul is because they know that they've got basically dead beetles eye of newt some old chicken bones some dead cat extreme it that's about all they've got at the federal reserve because the u.s. is technically. insolvent and so these witches are fighting fire with fire yeah they're fighting extreme it with dog poop. so you mention the collateralized debt obligations backed by the subprime mortgages in the us. here's a headline for you foreclosures may be undone by state ruling on mortgage transfer
the sounds like good news doesn't it this is the massachusetts highest court is poised to rule on whether foreclosures in the state should be undone because of the securitization industry practices at issue is whether a mortgage can be transferred without naming the reception which is a common securitization practice and whether the right to mortgage follows the promissory note is secure is when the note is sold so victory for home buyers for mortgage holders will mean that many of these banks might have to buy back these mortgages that they foreclosed on right of course that would mean losses for the banks so what are the banks going to do a little obama we need to change some laws that's right obama your are just change the laws because we don't want to suffer and it's a national security change the law is a blow that well we like yes sir bank of america i'll do whatever you want because the rule of law doesn't exist in the financial industry no no not america well the next headline suggested this could be true because remember during the deepest
darkest part of the financial crisis there was a common cause throughout america against the federal reserve whether you are right wing left wing progressive on progress red state blue state republican democrat many people wanted to end the fed and what happened with obama's legislation to repair the financial system he empowered the fed the federal reserve bank in washington so here's the headline for you max fed moves to gut predatory lending regulation so the federal reserve is pushing a new mortgage regulation that would effectively eliminate the most powerful federal remedy for predatory lending this remedy is called rescission which is used to strike down demonstrably illegal or fraudulent loan contracts and avoid a bank's ill gotten gains from such predatory lending practices under the fed's new proposal however borrowers will be required to pay off the balance of the loan. or the bank loses its right to for clues so that means bar was can still lose their
homes even in cases where banks have broken the law they're going to strike down predatory lending laws right so they can reopen the predatory lending down there in the ghetto on wall street so that clear office job you know jamie diamond j.p. morgan is a big big furry pimp pat then go up to the ghetto around america and say i go to purgatory loans all his own the pimp daddy pip shark you know it's disgusting if you think about it that they applied ghetto economics loansharking payday loans dealing is a primary business and sending out their ghetto gang bangers the u.s. pentagon sponsored military to go rape and pillage this is the entire business while supporting these banks that takes me to this next headline max and obama's new chief of staff william daley j.p. morgan vice chairman lobbied against financial reform foe of health care bill oppose consumer protection bureau he apparently was against it when timothy
geithner called him to basically lobby j.p. morgan for support of the consumer protection bureau he said at the time that he believed that there were sufficient consumer safeguards already on the books yeah well he's a stone cold liar and he's obviously part of the same ghetto economics of getting america into as much debt as possible so that they become indentured servants answering only to their slave master on wall street who are shilling and slopping and slinging their debt slingers not unlike the crack dealers but we already know that what i want to know is how does a bomber get up in the morning to look at himself in the mirror and not cry in embarrassment and shame as an american myself i am deeply embarrassed by this idiot totally in the service of the bankers well speaking of bankers goldman sachs myself ace books take without warning well apparently you know they have this deal for private. vespers to get involved with facebook there they wrote in the bottom that
you know they might actually be betting against them the last year of course they had to pay a five hundred fifty million dollars fine for betting against their own clients they broke the law now in this case in the facebook deal the securities laws say that you have more than five hundred investors you need to disclose more about the company to the f.c.c. but goldman sachs said one of the law doesn't apply to us you know the laws for the small people we don't we don't we don't you know if the law is something that gets in the way of us raping people we just change the law i mean they don't they're above the law member blankfein said he's doing god's work so god doesn't obey the law another point is made by simon johnson who in a piece called why are taxpayers subsidizing facebook and the next bubble he says that goldman sachs remember it was made by hank paulson into a bank holding company so they're able to borrow at the fed from the fed at zero percent and yet they're engaged obviously in very risky investments as if they are hedge fund own oil exactly under the volcker rule remember the whole point was to
shut down the proprietary trading desk because they're taking huge short term risks that were under written by the u.s. public who had to bail them out so the bypass that volcker rule restriction they've gotten into the pre i.p.o. market which doesn't even exist they invented it on the spot there's no even regulations that cover it and they've long gone to facebook well we've been speaking about banks i want to go on to this next headline this is from c.n.n. money two thousand and eleven year of the bank run this is the question they're asking because irish bank deposits declined in november for the fourth straight month the central bank said just this past week overseas deposits fled the country at their fastest pace in more than a year and so they then ask the question is a bank run about to bring europe to its knees but of course will we even know because it could technically we might even have to be bleeping out this word banker on here because it's against their. i didn't introduce legislation against even
mentioning the word bankrupt so i guess able to. know you can see them with of no you can't say it because it might cause people to be concerned about their deposits member northern rock northern rock in the u.k. people were concerned because they were involved in predatory lending they were offering on twenty five percent loans on people's homes which we said at the time was unsustainable bank collapse was a huge run justifiably so then you got into this whole period of bailouts and off balance sheet accounting in the shadow banking system but yeah of course it's very orwellian is that you can't tell the people that hey your bank's insolvent and you might want to move your money out of that bank put into a vault somewhere on some precious metals or something of value that itself becomes of course terrorist speech and you can't even have it ultimately what this means is that when you go to take money out of the a.t.m. it'll say well you can only take out twenty or thirty dollars a day or twenty or thirty euros a day it'll be basically a collapse but you won't know it because your money will be rationed to you but
speaking of money being rationed it's not real money and people get confused when they think money it's actually debt so that brings me to this next headline max credit cards used to pay a mortgage or rent by two million people this is in the united kingdom two million people or six percent of the population is putting their mortgage payment or their rent on their credit card this is inflationary of course because inflict credit card rates are sixteen percent on average in the u.k. at the moment many people of course are paying thirty percent but this has to be added to the same place in numbers that's one that's right and of course the governments are trying like mad to keep rates from going even higher by buying back their own debts so they're printing more money to buy back their own debts well they're they're doing this to keep money from being expensive for the bankers so the bankers like goldman sachs and j.p. morgan will always pay zero percent these people on the bottom who are suffering the inflation will continue to pay sixteen percent twenty. percent eighty percent
more every single month every single quarter for their rent and mortgage slowly and we also see you know inflation and this sovereign debt issue in the final headline here max jeff rubin peak oil means massive sovereign defaults so this is jeff rubin and he's a legendary oil analyst apparently and he says that it takes huge amounts of energy particularly oil to achieve the growth rates that all the near bankrupt governments around the world need to even service their debt let her own repay it so the minute global industrial production recovered from the recession oil prices were suddenly on the verge of triple digits that's not an accident since the two go hand in hand global oil demand is up two point five million barrels per day from last year any further increases in oil demand and oil prices will be trading comfortably in triple digit range so in other words g.d.p. growth you need it to reach to emulate the economy to pay off all the debt but g.d.p. growth is contingent on oil oil drives the global economy every single part of the
global economy is tied to oil but you've also he also mentions the fact that you've got peak oil so there's probably not even enough oil in the ground to finance the recovery so this just a huge intersection of competing die off not only are the birds dying in the fish dying and the crabs dying but the bond markets dying in the credit markets dying and the oil's dying that's peak oil well there's not enough oil in the ground at less than one hundred dollars per barrel and you need that less than one hundred dollars per barrel without to continue to grow the economy didn't the mayans say that two thousand and twelve was the big end of time i believe what we should ask the romanian which is they would know already well thanks for being on the kaiser report thank you max already when i come back we're going to be talking with gonzalo lira in chile about the economy what's happening down there so don't go away. anonymous.
days gonzalo welcome back to the kaiser report it's a pleasure being on max thanks for having me on all right now because ali apparently chile central bank has joined the other insane central banks around the world bloomberg reports that chile central bank has to buy twelve billion dollars to stem the peso region beating rally this looks like another chapter in the currency war what's going on you know exactly it's another part of the race to the bottom the problem for chile is that chile has an economy of about one hundred sixty three billion hours of two thousand and nine numbers and you know twelve billion as you can tell is that you know about roughly seven out of a percent out of that economy. the problem was that the dollar was collapsing against the possible so rapidly that it was really killing exports here chile is the largest exporter of copper in the world as well as seeing nitrates gold silver and so because of the rising commodity prices the past so was it through ing
tremendous value against the dollar it had risen i believe about thirty percent since the close of the two thousand eat rice eats you know thirty percent in two years and it was just chili exporters americans out what walk us through this methodology in other words all these countries around. world are trying to export their way back to growth after the huge financial collapse of two thousand and eight but clearly this currency war beggar thy neighbor policy it can it can result in everybody winning it sounds like what everybody's going to lose in the end or is it a game of chicken or does this all end up going that is the million dollar question or the billion dollar question of the trillion dollar question nobody really knows how it's going to end but it's going to end badly. in a bigger by member policy actually works when you have the medium sized or smaller economy amidst other economies that are doing ok and you basically devalue your currency to dig your way out of a hole that you dug a lot of
a classic example is france and sweden in the early ninety's when the have their own not a banking crisis and they you know recapitalize those banks devalued that grown out and dug their way out of their hole but the problem is when the reserve currency the largest economy in the world starts doing need bigger the neighbor policy it has a tremendous impact and various impact on all the other developing economies. not just developing economies excuse me but all economies full stop you know you mentioned the world's reserve currency the u.s. dollar is the number one offender and of course it is the world's reserve currency currency so you wouldn't want them to be in a position of trying to beggar thy neighbor in this way to accentuate the problems as you write in a blog recently gonzalo quote is the federal reserve really purchasing over sixty percent of two thousand and eleven fiscal deficit in a word yeah ok tell us what's going on here it's just pieces map and this is the
tragedy of it nobody seems to notice that everybody's been noticing q.e. two quantitative easing two the recently amount of purchasing six hundred billion dollars over eight months to prop up you know the treasury bonds and keep yields low but nobody's looking at it from the opposite end which is based. between investments of three light and this six hundred billion of q.e. two you basically have between sixty and seventy percent of the fiscal year two thousand and eleven debt u.s. government being purchased by the federal reserve i mean basically monetizing it so the only conclusion is that the united states is has officially become a banana republic but with nukes right the government is buying sixty percent of its own debt issuance are saying that monetizing fifty percent of that which means that they are printing dollars to buy the debt to monetize the purchases and of course that purchase debt is used to pay off
a lot of the structural debt that's still on the balance sheet going back to two thousand and eight so it's not showing up necessarily in the c.p.i. numbers the consumer price inflation but at the same time you see on the products side people they go to the store they buy a can of coke a call and it's a third of the size less than it was a month before it reminds me going back to roman times in the clip the coins the little clip around under near our one of those you know i think it was augustus i think that i was augustus who started doing that or clipping them and mixing tin and copper with silver in order to get you know basically to debase the currency yeah that's what they're basically doing you know i'm it seems that you know when empires start to decay this is one of things that they start doing they start creating a police state as the romans did under augustus or tigers rather and you know the united states today and. you know the homeland security knows stop the terrorist
that's that's being another effect is this you know the currency right so that's an interesting actually knowledge of their police state in roman times coinciding with the government debating the currency and now you've got a virtual debasement going. on with the downsizing of these consumer products people going to the store and they're finding that the coffee is no longer a colombian coffee it just says kind of generic coffee but the the price is the same so i have seen a sleigh there monetizing the debt simultaneously they're hiding through the shadow banking system a lot of the banking debt that is still yet to be disclosed of course they can always flash that whenever they need to hold the congress for an additional ballot so tell us about you know it all kind of shows up on the debt ceiling how far higher can the debt ceiling go the debt ceiling can go as high as congress wants it to go alternately you know it in a democracy karl marx said it best a democracy goes down the tubes when the people realize that they can vote
themselves all the money in the treasury i'm paraphrasing of course but that's the basic upshot of the quote that the congress can you know decide that they're going to increase the debt ceiling to one hundred trillion billion dollars and presto change about the law. now of course you have this issue between the treasury issuance of treasury notes in order to finance the deficit and the federal reserve that is pretty money in order to fill up that hole so ultimately you know you don't see an end to this policy the only way it's going to end is in two years now you do see some relative strength in the u.s. dollar and people are saying well you know the rise and interest rates the ten year yield is indicative of a strengthening u.s. economy is that the right conclusion my conclusion is that both the equities market which everybody knows in wall and and now the bond market are just fictions that's my own sense the only thing i'm paying attention to is commodities and commodities
are just continually rising and so it seems increasingly clear that between the manipulation of the equities market the clear manipulation of the treasury bond market by the federal reserve i mean they are putting that money. so much money into the market but it is never will that they can manipulate it at will i don't really a lot of people talk about the bond market with her bond market but to me it's just a fiction in a long term. outlook you know sure you know short term it goes up it goes down yield widened yields not good grow now or a long term doesn't really matter because it's all going frankly it's all going to hell in and part and the only thing that matters at this point to me at any rate are commodities and it's not that i'm a big old bugger i'm a somebody that's i don't trade regularly monitors to tell you the truth only going into it last year but it's inevitable that that's the future because the way that
the policies are being implemented both in the united states and in europe i mean after we can't forget europe and how badly mishandled the relatively paltry crises in greece and ireland that you recognize that the people who are running the two major currencies of the world really don't seem to know what they're doing ok now you're in latin america and of course that raises associated with the banana republics of the one nine hundred seventy s. we've got a couple of minutes just kind of go through some of the telltale signs they see in the u.s. right now that for you having study the economy in central latin america in the one nine hundred seventy some of the warning signs some of the red flags you see popping up that are a direct analogy to what happened in the seventies and south america well what happened in south america was over dead and that's because they had that in many countries they had the local currency to the dollar and thereby they were able to access on a whole host of credit facilities and they got over indebted and it all ended in tears now the same thing seems to have happened in the states but the only
difference was that the united states was able to problem its banks without doing the necessary surgery and amputations that are necessary to a dead banking sector they propped them up and they created the zombie banks the too big to fail so now the united states is. but how did the of reckoning with with its financial situation. and so those are the banks are still going up there and what is happening is that all this money printing has been going into commodities which seems to be where the store value is i shudder because it seems to me that the people who are running things in the united states have not learned anything from the hard won experiences of latin american countries and other emerging markets that had a similar situation as to what the united states is is going through today and yet have not taken to heart the lessons learned from those very painful episodes so i think that the united states is going to suffer the same fate but let me ask you about a conundrum that folks seem to overlook the u.s.
dollar world reserve currency all major commodities are priced in u.s. dollars and here in the united states people say well a lower dollar of course means that the u.s. through this beggar thy neighbor policy is able to export its way toward a greater g.d.p. growth however due to the fact that these commodities are priced in dollars the lower dollar means that their imports cost for the basic materials that go into manufacturing equal or more than offset the gain that they would pick up on the export side is that in the conundrum that they're going to be able to escape or is that all another kind of you know death that's nail for the dollar i think they're not going to be a conundrum you're exactly right i mean if you're trying to export your way out we need to import raw materials for your exports then you know you're taking from peter to give to paul it's it's not going to help your situation at all and also it's going to be hurting other countries that depend on dollar denominated
commodities especially i recall through commodities something i'm going to be writing about is how food prices are rising across the rest of the world and you know heard in poor countries because of this big are going to be policy of course united states has to look out. itself you know it be you know the monetary policy in order to make sure that the people in bangladesh you know are fed but still you know this policy is bigger than ever is going to have is having tremendous effects in the world economy and since it's never been done before we don't really know how it's going to end but we can predict that it's going to end badly well i want one last question when. you know folks on wall street who are speculating in the paper market for commodities and for the most part driving the price higher on the paper side of course their budgets for food as a percentage of income is probably one percent now so they don't feel the effect of a rising food price on their monthly budget whereas people in countries developing
countries like india probably sixty seventy eighty percent of their income goes to food and so it just smacks them right in the face now can anyone explain to these people on wall street that they're speculating that paper market is directly resulting in starvation and death in countries like india well you could argue that but you could argue much more close to home because you don't have to go to india you have to look at the poor people in united states i mean poor people the united states spend words of somebody percent of their of their income on basic necessities i mean i'm talking about housing food and clothing. you know if you're spending seventy percent of your income on housing food and clothing and there's a serious rise in prices you know it's going to hit you and it's going to hurt you a lot you know and i wrote a paper about this that i think i estimated that q e two and the effects of q e two in terms of commodity inflation as it would reach to agriculture products would affect roughly eighty.